What if…

Before you click “buy insurance” when you book your airline ticket, read the fine print. Most of these policies are so full of loopholes that they are rarely of value. Buy from a third-party insurer instead. Here are the most popular options offered by third-party companies.

TRIP CANCELLATION OR INTERRUPTION
Trip insurance providers usually cover cancellations for a variety of reasons, including sickness (either yours or someone’s for whom you must care), a death in the family, natural disasters or epidemics and terrorist activity in your destination area. Many plans even provide coverage if you are called for jury duty. Any decent plan will also offer coverage if your travel provider goes bankrupt and leaves you stranded.

However, if you want the magical “cancel for any reason” coverage, it will cost a bit more. Be sure to read the fine print and purchase your trip insurance as soon as possible after buying your ticket. Some benefits, such as “cancel for any reason” upgrades are only offered for a certain amount of time after you’ve booked your trip.

MEDICAL INSURANCE
If you’re traveling overseas, it’s important to note that most health insurance plans will, at best, provide partial coverage and, at worst, no coverage at all. For Medicare, there is never coverage abroad. Before you buy travel insurance, check with your medical insurance provider and ask these questions:

  • Does the policy cover emergency services abroad, including medical evacuation costs?
  • Will the insurance company guarantee payments to doctors and hospitals outside the country?
  • Will the insurance company pay medical care providers directly?
  • Does the policy cover injuries from high-risk activities such as mountain climbing or scuba diving?

It’s important to know the difference between evacuation-only insurance and medical care coverage. Evacuation-only will not cover any of the medical costs you incur abroad. Look for an insurance provider that offers 24/7 telephone support and has translators on staff. Medical insurance can be purchased as an add-on to other travel insurance policies or by itself.

LOST OR DELAYED BAGGAGE
When luggage is lost, damaged or delayed, baggage insurance covers your items and provides a daily stipend for purchasing essentials while you’re without your belongings. U.S. regulations require airlines to compensate travelers up to $3,300 for lost or stolen bags. However, once you are traveling internationally, the liability drops to about $9 per pound of luggage. A little trick is to pay for “excess value” when you check your bag (it’s not considered insurance because you’re buying it from the airline, but it does cover you). Your credit card company may also offer coverage. Be sure to ask specifics.

WHAT DOES IT COST?
Travel insurance can be surprisingly affordable. Good medical insurance can be as little as $10 per week, but a comprehensive plan that covers trip cancellation will cost more. Most trip insurance policies are based on the cost of the trip. A fully loaded policy could run around 8 percent of the cost of the trip.

WHERE TO BUY?
Compare twenty-one different travel insurance companies at insuremytrip.com.